Are Audio Dealers in Trouble? Readers Respond

In Issue 105 we featured an Industry Viewpoint column from Magnepan marketing manager Wendell Diller. He asked: are audio dealers in trouble? Where can a consumer go to listen to high-end audio products when US audio dealers are shrinking in number?

We’ve received a number of responses and are running some of them here (some in edited form). Let’s keep the dialog going on this important issue facing manufacturers, dealers, and especially customers.

Craig:
When I entered the hobby in the mid-’70s, dealers were plentiful. We even had one in my home town, Peoria, IL (Electronics Diversified), and Chicago (Paul Heath – where I encountered my first [Magneplanar] Tympani – and others). And I was super fortunate to have a wonderful dealer in Milwaukee, where I finished college.

I’ve heard many stories about snooty salesmen (never snooty saleswomen for some reason), but I’ve never encountered any. I thought I had, initially, at that visit to the Chicago Paul Heath shop. The gentleman at the sales counter asked if he could help us. We were just looking, as high-end shops were still very new to us, and we told him so. He replied, “so you’re just here to waste an afternoon at our expense?” My expression must have revealed my shock and embarrassment, when his face broke into a broad grin, and he said, “Great! You’re my kind of people!” Feeling relieved, we headed into the shop’s middle room, which held equipment of the price points we’d be most comfortable with, and he stopped us, saying, “don’t go in there – go all the way to the back, where the really good stuff is!” That’s where we found the Tympani. We stood there listening, dumbfounded.

Those are the kinds of experiences that today’s audiophiles just don’t get.

highstream:
I’ve had exactly the opposite experience: I come to listen to the best, politely say so, and invariably get guided to the lower end offerings, even though I look like an executive. Sometimes I approach a shop with a smaller task, perhaps a set up issue I need help with, and see how they respond. I see it as developing a relationship that can be built upon.

Pete Wilson:
Used to have a useful, unpretentious hi-fi store in Austin, TX – Audio Systems. But eventually, the owner (who owned the property as well as the business) decided he’d got to the point where he’d like to retire. So he did, and the place was picked up by one of those home automation companies that install giant AV theaters. They wanted a storefront; but they’re used to only buying kit from distributors when they have a firm installation order; they weren’t prepared, for example, to get a NAD M12 in so I could try (and almost certainly buy). The old business would have done it for a real customer. So, I don’t shop there anymore.

dr.goodears:
All the various marketing methods you mentioned: dealer showrooms, factory-direct sales, going to audio shows to see and hear products, consumer education and engagement such as Paul [McGowan’s] marketing campaign of daily posts, videos, forums, celebrity and reviewer endorsements, and existing customer referrals are all important channels to reach, engage and grow your customer base.

The fundamental problem in my mind is the lack of formal arts education in primary, elementary and secondary schools today. This began when school’s started cutting music programs from their educational roster, music appreciation, music theory, band class and the emphasis on original composition. The noise emulating from kid’s modern mobile phones is enough to make anyone run for cover.

Along with learning about history and culture, music inspires analytical thinking, problem solving, teamwork, motivation and self-discipline. Unfortunately, today, music education is a vanishing subject. By contrast, many European and Asian countries require schoolchildren to study the arts every year.

One solution may just be the creation of an association, not unlike the CTA [Consumer Technology Association] or AAHEA (Academy for the Advancement of High-End Audio; remember that one?) to promote the arts in schools to inspire, develop and grow new music enthusiasts.

Craig:
The decline of the dealer network really isn’t anything other than a response to the market.

It seems to me that the industry grew from the ’50s through the ’80s because of two things: the technology and its effects were new enough that it was attractive to older buyers who were already established music consumers via classical concert attendance and who loved the sound so much they wanted to reproduce that experience in their homes; and younger buyers, who viewed art (especially music) as a tool for social change, granting it status as a central theme in their lives, which made it important to be able to reproduce it as faithfully as possible at home, for the greatest emotional impact. That first group has long since died off, and the second is now sitting around lamenting the declining base of the industry.

Not only do I not know what the answer is, I’m not sure any longer that there is one.

B. Jan Montana:
To me, the answer seems obvious and some manufacturers are already using it. I discovered it through Sanders Sound Systems (formerly InnerSound).

If you wish to audition their speakers, simply order a pair, have them shipped to your home, listen to them for 30 days, and send them back for a refund if they don’t work for you. Without a dealer mark-up, Sanders can sell his speakers for half price. Seems like a win/win for both the manufacturer and the consumer.

I’d insist on a home demo even if I was buying speakers from a dealer because they sound different in every acoustic environment. Partnering equipment and individual tastes also affect buying decisions.

I don’t know why all manufacturers don’t to this, but perhaps I’m missing something.

audiojerry:
It seems like being a dealer requires too much of an investment including the cost of owning or renting a store property and carrying a sizable amount of expensive inventory that may not sell.

How about using “satellite” dealers. By that I mean an arrangement where an audio manufacturer or distributor partners with consumers who have previously purchased their products to become “in home” dealers.

The manufacturer/distributor supplies owners living in a number of geographical locations with the proper equipment to provide an in-home demo system to prospective buyers. Each satellite dealer could have a different setup of demo equipment. A website would be needed to attract prospective buyers and direct them to locations where the products could be heard. If the prospect likes what he/she hears, they can place an order through the website.

It would eliminate the inventory and dealer expense. And the compensation for the satellite dealer could be to keep the demo equipment or receive a commission for each sale.

iamdriv3n:
Poor Magnepan, some of the best products for higher end audio that covers almost any budget and their website, sales, marketing strategy and reliance on dealers is straight out the 1970s. The LRS is proof they continue to innovate but how they get their products into consumers’ homes is a chore for the consumer. They would be constantly sold out of product if they invested in online ordering, parts ordering (including upgrade and repair kits). The reviews across their product line speak for themselves.

The only reason I go into any dealer or dealership is to demo a product (showrooming) and then check online to see has the best deal. Consumers are a lot more complex/savvy and have the world in their hands (phone) so the salesman is less valuable than they were. Why take his word when you can get thousands of real world reviews in real time online?

Paul172:
I’m also sad to see the demise of the audio boutique/stores. I have been listening to music as long as I could remember. It wasn’t until I discovered Audio Consultants when I discovered and truly appreciated high-end equipment. Not only could I go to the stores and listen to the equipment but at no cost I could bring it home for the weekend and enjoy it at my house! I was hooked – I thought I was hearing music for the first time! Unfortunately, we could see the writing on the wall and these businesses are dying if not extinct. [The store] Abt has a great selection of equipment on display but it’s not the same if you can’t audition it in your home.

What should be a concern for manufacturers is, how are you going to introduce your products to the next generation of audiophiles if they can’t go and experience it hands on? iPhones and headphones will be they’re reference and they will be missing out on listening to what the artist really wants you to hear.

Craig:
Home auditions are common, of course, when it comes to factory-direct and internet sales, and even in the “olden” says of mail order. In the decline of physical storefronts, I’ve purchased a number of individual components that way, and it’s worked out well. I’ve only had to return items twice because I didn’t like their sound.